1. Suppose that Teton began business in year 1 and that it recognized a $6,000 net 1231 loss in year 1. Assume that the current year is year 6 and that Teton reports a net 1231 gain of $30,000 for the year. Teton did not recognize any 1231 gains or losses in years 25. For year 6, what would be the amount of ordinary income and long-term capital gain?

   Ordinary income: Long-term capital gain:

2. Suppose that Teton began business in year 1 and that it recognized a $6,000 net 1231 loss in year 1. Teton also recognized a $4,000 net 1231 loss in year 5. Assume that the current year is year 6 and that Teton reports a net 1231 gain of $30,000 for the year. For year 6, what would be the amount of ordinary income and long-term capital gain?

Ordinary income: Long-term capital gain: